WAVES FITNESS AND AQUATIC CENTRE REDEVELOPMENT
7.6 PROCUREMENT Probity Plan
Project delivery will require the procurement of the demolition and construction contract for the new WAVES Aquatic Centre, and the procurement of the Future Operator.
These transactions must be managed within an appropriate probity framework. This includes the requirement to prepare and implement a probity plan. A probity plan as described by ICAC10 provides a mechanism to manage the key fundamentals of:
10 Probity and Probity Advising – Guidelines for Managing Public Sector Projects, Independent Commission Against Corruption (ICAC), November 2005
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x best value for money: fostering an open competitive environment, and assessment of proposals on their merits
x impartiality: ensuring the integrity of the process is maintained with unbiased and fair assessment x dealing with conflicts of interest: decisions must be made without public officials being influenced
by private interests
x accountability and transparency: reporting mechanisms to ensure that the public and authorities are aware of how the project is being managed
x confidentiality: hand in hand with transparency, confidentiality is also required for certain elements such as proposals, pricing and intellectual property.
Prior to commitment to this project, Council will develop a probity plan in accordance with the ICAC guidelines for these transactions describing the processes to be applied at the following stages:
x prior to issue of the EOI or RFT x prior to the closing date for proposals x during assessment and evaluation x after selection
x ongoing throughout delivery.
Tender Evaluation
The procurement of Services and Construction Contracts will be conducted in accordance with:
x Tendering Guidelines for Local Government, October 2009 x Local Government (General) Regulation 2005
x Local Government Act 1993
x NSW Government procurement Guidelines, December 2011.
Prior to commencement of each tender process, THSC will prepare a Tender Evaluation Plan (TEP) of the tender strategy, stages, tender evaluation panel, and evaluation criteria. The TEP will be reviewed and endorsed by PCG prior to release of tender documents.
The contract for demolition and construction will be let based on a fully documented design. The contract will encourage the contractor to propose innovative delivery solutions, and will consider the inclusion of performance incentives for on-time and on-budget delivery. In addition to value-for-money criteria, the evaluation criteria will have a focus on the contractor’s ability to complete and commission WAVES to achieve operational commitments, and the contractor’s proven ability and methodology to achieve zero defects completion.
The contract for the Future Operator will be on a fixed term basis, with performance incentives linked to a range of operational performance criteria that will be evaluated annually and will seek to ensure the highest quality user experience, while maximising potential commercial returns to the Future Operator and for THSC.
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8 CONCLUSION
The Capital Expenditure Review has identified and analysed a range of options for responding to the needs of the local community, with the aim of:
x providing contemporary aquatic and fitness facilities to meet the needs of users
x increasing the capacity of aquatic and fitness facilities to meet current and projected demand x addressing current concerns regarding the condition of the facility and ongoing non-compliance
with water quality safety standards
x providing a facility to meet current accessibility standards.
Redevelopment of the Waves Fitness and Aquatic Centre (Option 1) is identified as the preferred option, providing an incremental benefit to cost ratio (BCR) of 1.5:1. The Project is expected to drive significant increases in visitation, resulting in:
x improved financial viability of the centre, and the elimination of operational subsidies
x improved health outcomes for the community due to improved access (particularly for seniors), and increased health benefits - due to increasing opportunities for a larger number of users to participate in a wide range of aquatic and leisure activities.
THSC has completed a risk assessment that has considered risks associated with planning, implementing and operating the preferred option. There were no identified risks that posed such a threat to the project to suggest it should not proceed, with identified risk treatments being handled within normal project management processes.
THSC has sufficient equity to fund the capital cost of the project (estimated at $30 million). The project has been forecast and prioritised in Council’s Capital Works Plan, and a review of Council’s 10-year financial plan indicates a strong financial position over the next decade, with sufficient reserves to fund the upfront capital costs, lifecycle maintenance costs. and depreciation expense for the centre.
It is recommended that THSC proceed with the Redevelopment of the Waves Fitness and Aquatic Centre (Option 1) as the preferred option.
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ATTACHMENT A – CONSULTATION SUMMARY
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Summary of the Have Your Say consultation by question:
May/June 2018 Consultation Snapshot
Key Focus Areas What people said What do you like
about the proposed upgrade of Waves?
x Love the idea, concerned about the upheaval impacts on users x Additional pool – great idea
x Improvements to spectator amenity definitely needed x Great idea to provide more parking
x Love gym upgrades
x Love retention of open air 50m pool
x Don’t do anything to it, build a new one somewhere else in the Hills
What could beimproved?
x Need to provide undercover area for outdoor kids play and water play x Improve the shower facilities and toilets
x Provide outside shower area
x Provide lockers for keys, wallets, valuables x Improve the water play offered for smaller kids x Extend the hours of operation year round x Make it bright and colourful
x Better technology and modern features
x Better entrance and exit area to avoid pedestrian congestion
x Provide a cover over the outdoor pool so people can continue to swim all year round
x Add Diving blocks x Add Boom dividers
x Add Connections for laneway ropes to go either direction in the pools x Add more Parking
x Add a 25x8 indoor pool, good depths for diving in pools, combine LTS and hydro pool.
x Need better seating
What shouldremain?
x The greenery and open space x The outdoor pool
x The outdoor elements of the gym (veranda) x Keep the trampolines
x The trees
x Keep the outdoor gym areas
What is missing?x A diving pool
x A water polo pool x A hydrotherapy pool
x Ramps into the pools for dignified access x Crèche
x Another training pool or pool for lap/casual swimmers x Family change rooms
x Larger shower cubicles
x More enclosed space for bad weather, so spectators and belongings stay dry or there is protection from the sun
x More lanes in pools x Ramps into pools
x Need more than 3 pools at this site
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x Improved accessibility throughout x Water play park
x Indoor heated pool s
x A decent café/ seating/ meeting space x Shaded areas/ shade canopies x A waterslide
Other questions
x What is the timing of the redevelopment/ what is the extent of the closure of facilities?
x Why do these works now, why not wait until Parramatta pool is completed and opened?
x Will the project be staged to allow ongoing use to reduce impact on users?
x Will another aquatic centre be planned or provided in Box Hill or North Kellyville?
x Will there be inclusion of solar and smart energy technology in the build?
x How will the pool be run and operated?
x Will the rose garden be impacted; will any enlargement of site occur?
x Will green space and trees be retained in redesign?
x Have you visited other facilities as part of investigations and planning?
x Will there be a hydrotherapy pool?
x Will there be a café or a kiosk, will it serve healthy foods?
x Will there be dedicated space for lane/lap swimmers if an additional pool is provided?
x What will the fee structure look like?
x How much more car parking will be provided?
x How will this be paid for?
x What will be proposed as alternatives for current users including gym users, lap swimmers, swim squad and learn to swim during construction?
x What will happen to school carnivals when pool is closed for construction?
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ATTACHMENT B – PROGRAM
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Waves Redevelopment
#ItemMthsJulAugSepOctNovDecJanFebMarAprMayJunJulAugSepOctNovDecJanFebMarAprMayJunJulAugSepOctNovDecJanFebMarAprMayJunJulAugSepOct 1Design - Tender Preparation3Tender Prep 2Design - Tender Process3Design Tender 3Council Report1CR 4Design - Engage Contractor1Engage 5Design - Work (inc REF)* Critical *6* Design Work * 6Assessment Pathway - SEPP & REF1SEPP 7Council Report1CR 8Construction - Tender Process3Construct Tender 9Council Report1CR 10Construction - Engage Contract1Engage 11Site Remains Operational - March 202012OperationalLease Exp.123456101112 12Aquatic Centre Closed - April 20201Close 13Construction - Procure, Plan, Prep6Contractor Project Preparation 14Construction - Demolition2Demolition 15Construction - Work (inc T&C)1616x Months Construction6789101112131415T&C 16Operations - Input into Design3Input into Design 17Operations - Tender Preparation2Tender Prep 18Operations - Tender Process3Operations Tender 19Council Report1CR 20Operations - Engage Contractor1Engage 21Operations - Pre-Start Operations12Pre-Start Operations6789101112Start 22Council Election - September 20201Elect 23Aquatic Centre Open - October 20211OpenO p e r a t i o n s
2018201920202021 Notice PeriodNotice Period
D e s i g n C o n s t r u c t i o n
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ATTACHMENT C – RISK REGISTER
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The Hills Shire Council - WAVES Aquatic Centre Redevelopment Risk Treatment Risk No.Risk CategoryRisk EventMajor CauseLikelihoodConsequenceRisk levelProposed Treatments (Prevention / Mitigation / Investigation) 1Investment/ Planning RiskAllowances for annual asset maintenance costs (as % of ARV) may differ significantly from actual needs (higher or lower) over the life of the asset.
Lack of availability of maintenance benchmarks for aquatic centres, and a wide range of benchmark rates used for comparable aquatic centre projects in planning stage.L3 PossibleC5 SevereB1
- Financial appraisal (and affordability review) allows for total annual maintenance costs equal to 2% of Asset Replacement Value - which is a common benchmark for building assets. - Maintenance risk will be shared with the Future Operator - Whole of Life cost estimates to be developed by the QS once design is complete. - Detailed design to include objectives for minimising WOL costs. 2Investment/ Planning RiskThe project fails to provide the best value for money solutionProject scope includes high-cost features or capacity that are not sufficiently valued by users, and/or fail to contribute to a higher ERR ratio. L3 PossibleC5 SevereB1
- Establish clear project objectives - Prioritisation of elements of the project scope to reflect demand projections, community feedback, and feedback from review of comparable facilities - QS reviews of design at key milestones - including implications for capital and WOL costs PM to manage design phase. - Identify strategies for staged expansion through the life of the asset 3Investment/ Planning RiskThe redeveloped WAVES fails to achieve the anticipated financial results
Lack of effective operational flexibility or performance incentives for the Future Operator L3 PossibleC5 SevereB1
- Contract for WAVES Future Operator to include profit-sharing incentives - Contract to include allowances for the Future Operator to proposed adjustments to the fee schedule to reflect market conditions - CER will include sensitivity analyses - considering Expense Recovery Ratios ranging from 97% (pessimistic) to 107% (optimistic). 4Investment/ Planning RiskCouncil delays or defers project approval and funding, with associated community dissatisfaction and ongoing water quality noncompliance
Risk of changing Council/community priorities and changing preferences for investment in WAVESL1 RareC5 SevereB1
- Update Community Strategic Plan to include WAVES redevelopment - Regular communications with Council on progress - Community newsletters/announcements 5Investment/ Planning RiskCouncil delays or defers project approval and funding, with associated community dissatisfaction and ongoing water quality noncompliance
WAVES Redevelopment is not yet identified as a commitment within Council's Community Strategic PlanL2 UnlikelyC5 SevereB1
- Update Community Strategic Plan to include WAVES redevelopment - Regular communications with Council on progress - Community newsletters/announcements 6Investment/ Planning RiskCouncil delays or defers project approval and funding, with associated community dissatisfaction and ongoing water quality noncompliance
Competing investment needs impact financial capacity or timing of availability of capital fundingL2 UnlikelyC5 SevereB1 - Update the LTFP to identify WAVES and other major capital investments 7Investment/ Planning RiskRedeveloped aquatic centre operations fail to achieve revenue projections
Community (and Council) resistance to proposed adjustments to entrance feesL3 PossibleC4 SignificantB1- Fee increases to be linked to WAVES renewal - Provide advance notice of proposed increases - Fees not to exceed other competing facilities -EarlyendorsementoffeestructurebyCouncil 8Investment/ Planning RiskRedeveloped aquatic centre operations fail to achieve revenue projections Capacity of redeveloped WAVES is insufficient to meet demand (eg. LTS pool) L2 UnlikelyC4 SignificantC - Identify key services with potential for demand to exceed projections - Design facilities to be flexible to cater for changing demand - Identify strategies for staged expansion through the life of the asset
Risk IdentificationRisk Analysis WAVES Risk Register Dec2018 v5 Page 1 of 5
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The Hills Shire Council - WAVES Aquatic Centre Redevelopment Risk No.Risk CategoryRisk EventMajor CauseLikelihoodConsequenceRisk levelProposed Treatments (Prevention / Mitigation / Investigation) 9Investment/ Planning RiskRisk of project delays due to community feedback / objections
Proposed redevelopment fails to meet the needs of some community groupsL1 RareC2 MinorD- Implement effective community consultation process, and keep the community informed of progress 10Design RiskDesign fails to adequately respond to Council's ESD policyESD features are yet to be agreed, designed or pricedL3 PossibleC2 MinorC- ESD policy and guidance to be included as design criteria in design consultant brief - QS reviews of design at key milestones - including implications for capitalandWOLcosts 11Design RiskRisk of poor quality design outcomesCouncil's project team is inadequately resouced to effectively manage design phaseactivities L2 UnlikelyC3 ModerateCAppointment of an external Project Manager for design and construction phases - within associated costs included within the total project budget. 12Design RiskDesign is considered inferior to comparable contemporary facilities within the Sydney metro area
Design fails to take into account latest trends, technology and innovationsL2 UnlikelyC3 ModerateC -Benchmark facilities to be identified in design brief - Design contract to require designers to benchmark contemporary facilities 13Design RiskInadequate off-street parking has a negative impact on visitation
Lack of traffic/parking study. Parking is occupied by other users.L3 PossibleC2 MinorC- Design investigations to include traffic and parking study 14Design RiskDesign solution fails to adequately reflect community needs Lack of timely or effective community consultationL2 UnlikelyC4 SignificantC- Develop and implement a comprehensive consultation strategy 15Design RiskDesign solution fails to deliver project objectives within budget
Inadequate focus on affordability and VFM during design process L3 PossibleC4 SignificantB1
- Ensure clarity and support for project objectives - Ensure prioritisation of elements of within the project scope - Ensure well defined design performance criteria - Ensure design team and PM define process for managing design to budget and maximising VFM - QS reviews of design at key milestones - including implications for capital and WOL costs 16Design RiskDesign solution fails to optimise the design to maximise commercial outcomes
Design fails to provide capacity or functionality to support major revenue generating activities (ie. café, LTS, gym, functions, health services, etc.) L3 PossibleC4 SignificantB1 - CER and stakeholder consultation to identify primary drivers for commercial outcomes - commercial performance to be included as input for the design brief 17Design RiskDesign solution fails to optimise the design to maximise commercial outcomes
Design fails to optimise functional relationationships and support service capacity - resulting in operational inefficiencies for the Future Operator L3 PossibleC3 ModerateB2
- identify design elements impacting operational efficiency - operational efficiency to be included as part of design review process 18Design RiskWOL costs exceed expectationsFailure to adequately consider WOL costs in the design L3 PossibleC5 SevereB1
- Design team to identify building elements having greatest impact on WOL cost estimates - Ensure careful selection of plant and equipment, and finishes to minimise WOL costs - QS scope to include WOL cost review and advice WOLcoststobereviewedthroughdesigndevelopment19Design RiskDelays to the design programStakeholder-initiated design changesL3 PossibleC5 SevereB1- Implement strict change control processes - Ensure adequate time for design development and review processes 20Design RiskDesign fails to respond to all operational needsFailure to design for all operational scenarios (eg. contamination incidents, plant failure, maximum visitation)L2 UnlikelyC4 SignificantC- Council to work with the design team to define extreme operational scenarios - including contamination events, plant failure, extreme visitation events 21Design RiskDelays to statutory planning approvalsParking or environmental concernsL2 UnlikelyC3 ModerateC- Early identification of planning and approvals issues -EarlyengagementwithCouncilofficers,andexternalauthorities WAVES Risk Register Dec2018 v5 Page 2 of 5
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The Hills Shire Council - WAVES Aquatic Centre Redevelopment Risk No.Risk CategoryRisk EventMajor CauseLikelihoodConsequenceRisk levelProposed Treatments (Prevention / Mitigation / Investigation) 22Demand and Market RiskVisitation fails to achieve expectationsCompetition from other facilities within the catchment (particulalry for gym and LTS)
L3 PossibleC4 SignificantB1- Use conservative visitation projections - Benchmark design against competing venues 23Demand and MarketRiskVisitation fails to achieve expectationsPoor (infrequent or unreliable) public transportconnectionsL3 PossibleC3 ModerateB2- Ensure adequate offstreet and accessible parking capacity -Negotiatewithbuscompaniestoenhancelocalbusservices 24Demand and MarketRiskVisitation fails to achieve expectationsFailure to deliver a sufficiently contemporaryandfunctionaldesignL2 UnlikelyC4 SignificantC- Establish design benchmarks -Implementeffectivedesignreviewprocesses 25Demand and Market RiskVisitation fails to achieve expectationsFeatures do not fully meet community needs and expectations - selected features may be discarded to improve value for money (eg. 25m pool, spa facilitiesetc) L3 PossibleC4 SignificantB1
- Implement a structured VFM process that prioritised features aligned with community expectations and visitation projections 26Demand and Market RiskLow initial visitationInadequate ongoing communication with key stakeholders prior to opening the new facility (ie. schools, seniors groups, etc)
L3 PossibleC4 SignificantB1- Develop and implement a Stakeholder Communications Strategy - Allocate sufficient reources to stakeholder communications 27Demand and Market RiskLow initial visitationLack of effective promotion at opening of new facilityL3 PossibleC3 ModerateB2- Develop and implement a Stakeholder Communications Strategy - Allocate sufficient reources to stakeholder communications - Work with the Future Operator to coordinate the development of marketingmaterial 28Demand and Market RiskVisitation exceeds expectationsVisitation projections have underestimated the impact of the current poor state of the WAVES aquatic centreL3 PossibleC3 ModerateB2- Allow flexibility in the design for future expansion 29Demand and MarketRiskInadequate capacity to meet projecteddemandDemand for LTS and other pool-based classesexceedsexpectationsL3 PossibleC4 SignificantB1- Design of aquatic facilities to maximise flexibility and capacity 30Management and Operations Risk
Delays to appointment of Future OperatorLack of competition in the market L3 PossibleC4 SignificantB1- Council to consider early market engagement through EOI process - Council to determine performance incentives as a basis for increasing attractiveness to the market 31Management and Operations Risk Delays to appointment of Future OperatorTight program and lack of Council resourcesL2 UnlikelyC4 SignificantC- Establish detailed procurement program and resourcing estimates (including the need for external consultants - legal, probity, etc.) 32Management and Operations Risk
Delays to commencement of Future OperatorPoor management of operational commissioningL3 PossibleC4 SignificantB1- Adjust timing for Procurement of Future Operator to allow for involvement in planning prior to practical completion - Ensure Future Operator involvement in training provided during the operationalcommissioningphase 33Management and Operations Risk Future Operator performs poorlyLack of effective performance incentives and penalties L3 PossibleC4 SignificantB1
- ensuring a high quality facility at completion (as an enabler of superior operator performance) - allowance for an extended pre-start planning and operational period for the Future Operator - extensive involvement of the Future Operator in the facility commissioning process - inclusion of comprehensive performance incentives within the operations contract - benchmarking performance incentives with other comparable aquatic centres, and independent review of the contract to ensure the effectiveness of proposed incentives. - Council to arrange independent review of proposed incentives to ensure enforceabilityandeffectiveness. 34Management and Operations Risk
Future Operator performs poorlyHigh operating costs due to inefficient facility designL3 PossibleC3 ModerateB2- identify design elements impacting operational efficiency - operational efficiency to be included as part of design review process WAVES Risk Register Dec2018 v5 Page 3 of 5